Mining industry needs more automation, survey shows

Mining industry needs more automation, survey shows

by:DAMON KITNEY

From: The Australian

October 15, 2014 12:00AM

THE mining industry needs to adopt more automation to be competitive, even if it means fewer jobs, and the resource sector is not investing enough in cutting-edge technology, according to a survey of leading industry executives.

The survey conducted by Hall & Partners Open Mind for The Australian of 105 senior managers in industries related to the resources sector found more than half of those surveyed believed the mining industry needed more automation, despite the associated impact upon employment.

Almost half (47 per cent) believed the sector was not investing enough in cutting-edge technology.

Rio Tinto has grown its driverless truck fleet in the Pilbara region to more than 50 vehicles across four mine sites in recent years and plans to eventually grow it to 150. It remotely controls many operations at its mine sites in the region from Perth, more than 1500km away. Rio is also spending $US520 million ($600m) on the introduction of autonomous trains on its Pilbara rail network to be rolled out next year.

But BHP has taken a more cautious approach to automation technology, running a dozen driverless trucks at its newest Pilbara operation, Jimblebar. It is also looking at automating trains, but has stated that complete automation is unlikely.

The Hall & Partners survey found that 43 per cent of respondents believed that taking advantage of big data would be crucial to ensure the competitiveness of the mining sector.

Two years ago GE launched the concept of the industrial internet, claiming the use of big data in the sector would drive huge productivity gains through the predictive nature of monitoring equipment. It claimed the use of huge volumes of data meant it could promise the producers there would be no unplanned downtime at their plants and “complete optimisation of their assets”. It has also been adapting the concept for use on undersea wells in the oil and gas sector.

The chief executive of GE Mining (Global), Steve Sargent, told a TV panel discussion for the Powering series that innovation was going to have to play a part in helping companies become more efficient.

Data analytics would play a significant role in improved asset capability — in “every major piece of machinery through the mining process, from extraction through to development through to smelting, leaching, through to refining”.

Sixty-four per cent of respondents nominated falling prices in key resources, such as iron ore, as among the impediments to growth of the sector. Fifty-one per cent nominated a slowing Chinese economy as an impediment, with little optimism (30 per cent) that it will improve in the next 12 months. Government red tape was also seen as an impediment to growth by nearly a third of respondents.

Forty-four per cent thought that the iron ore price was likely to fall further in the next 12 months.

The survey found that 66 per cent of respondents believed that the local mining sector should prioritise local employees when filling positions. Nearly half disagreed with the suggestion that Australian resources workers were poorly skilled compared with foreign competitors.

As proposed developments of coal-seam gas reserves in NSW face stiff opposition from environmentalists and farmers concerned that drilling practices for extracting methane gas trapped in coal seams could contaminate underground water supplies, the survey found that more than half the respondents (57 per cent) believed that the sector had done a poor job of educating the public about CSG.

But it also found that 47 per cent of respondents agreed that local communities should have concerns about CSG in their area. And 38 per cent of respondents also disagreed with the assertion that state governments should not be exercising their right to ban onshore CSG activities.

Dow Chemical chief executive Andrew Liveris recently argued that business and government in NSW needed to urgently work together to ensure the state’s gas reserves could be utilised to avoid a looming supply crisis.

By contrast Queensland has different rules applying to CSG exploration to feed billions of dollars of liquefied natural gas plants on the coast at Gladstone.

The Hall & Partners survey found that 71 per cent of respondents believed that Australian governments were not investing enough in resources for the renewable energy sector. Fifty-six per cent disagreed with the assertion that it was not up to Australia to develop cleaner coal technology and that this should be done by countries buying coal from us.

The findings come after a similar survey in July found that leading managers in the resources and energy sector and in key energy-using sectors such as manufacturing and aviation believed the renewable energy target should be retained or even lifted.

The RET implemented by the former Labor government would see 20 per cent of electricity generated by renewable sources such as wind and solar by 2020.

The Abbott government is yet to finalise its response to the RET review overseen by businessman Dick Warburton, which recommended either closing the program to new entrants or moving to a demand-limited scheme that was ­reviewed each year.